Markets Edge Higher, Utilities and Defensive Stocks Strongest

By

Dave Kansas

Apr 6, 2011 1:40 pm ET

While the market inches higher, some of the underpinnings of the upward move aren’t altogether positive.

For starters, cyclical stocks are weak and defensive stocks are strong. At this point in the recovery (early, one hopes), the pattern is usually the reverse. Stocks like Kraft, Coke and Procter & Gamble are higher, while DuPont, Honeywell, Caterpillar and Deere are lower.

Also, utilities, another classic safety play, are putting in a strong day – they’re the top performing group among the S&P 500’s 10 sectors. Southern, PG&E, Constellation Energy and Public Service Enterprise Group are all higher.

On the more positive side, financials are doing well, boosted, in part, by events in Europe. Banks there have started tapping the markets for funds that will strengthen their capital positions. European banks are higher in the U.S., with Societe Generale and Barclays up more than 3%, HSBC up more than 2% and Deutsche Bank up about 1%.

In the U.S., Goldman Sachs, Citigroup, J.P. Morgan Chase and Morgan Stanley are all up more than 1%, U.S. Bancorp, Wells Fargo and Bank of America are each up just less than 1%.

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